Trustee Duties in Ohio: What R.C. 5808 Requires

An Ohio trustee’s core duties, set out in R.C. Chapter 5808, include administering the trust in good faith solely for the beneficiaries’ interests (duty of loyalty), acting impartially among multiple beneficiaries, investing property as a prudent person would, keeping adequate records, and informing beneficiaries of the trust’s status. A trustee who ignores these duties risks removal by a probate court.

What Are the Duties of a Trustee in Ohio?

A trustee’s duties in Ohio come directly from statute, not just from the trust document. R.C. 5808.01 requires a trustee to administer the trust in good faith, according to its terms and the interests of the beneficiaries. The Ohio Trust Code then breaks that general duty into loyalty, impartiality, prudent administration, recordkeeping, and disclosure.

A trustee owes the trust several distinct statutory duties under R.C. Chapters 5801 to 5811 of the Ohio Revised Code. Beyond loyalty, impartiality, and prudent administration, a trustee must also control and protect trust property, keep adequate records, and keep beneficiaries reasonably informed. The sections below walk through each duty and the specific R.C. 5808 section that creates it.

What Is the Trustee’s Duty of Loyalty in Ohio?

R.C. 5808.02 requires a trustee to administer the trust solely in the interests of the beneficiaries. A sale, loan, or other transaction that benefits the trustee personally, or that involves the trustee’s spouse, child, sibling, or parent, is presumed to involve a conflict of interest and can be voided by an affected beneficiary.

R.C. 5808.02 governs the trustee’s duty of loyalty. A beneficiary can void a self-dealing transaction unless the trust document authorized it or a court approved it. The duty of loyalty prohibits self-dealing with trust assets. A trustee who wants to buy trust property, lend the trust money to a relative, or otherwise transact with the trust in a personal capacity should get court approval or explicit authority in the trust agreement first. This duty applies whether the trustee is a family member, a friend, or a living trust named as the vehicle for the family’s estate plan.

What Is the Duty of Impartiality Among Beneficiaries?

Under R.C. 5808.03, when a trust has two or more beneficiaries, the trustee must act impartially in investing, managing, and distributing trust property, giving due regard to each beneficiary’s respective interest. This matters most when one beneficiary receives income now and another receives principal later, since favoring one group’s interest over the other’s can itself be a breach.

R.C. 5808.03 imposes the duty of impartiality. The duty of impartiality protects beneficiaries with competing interests. A trustee balancing a surviving spouse’s need for income against a remainder beneficiary’s interest in preserving principal, for example, has to weigh both sides rather than defaulting to whichever beneficiary is easier to communicate with.

What Is the Duty to Act as a Prudent Person?

R.C. 5808.04 requires a trustee to administer the trust as a prudent person would, considering the trust’s purposes, terms, distributional requirements, and other circumstances, and to exercise reasonable care, skill, and caution while doing so. This standard applies to investment decisions as well as day-to-day management of accounts, rental property, and other trust assets.

R.C. 5808.04 sets the prudent person standard. The prudent person standard governs trust investment and administration decisions. A trustee is not expected to have professional-level investment training; the statute expects reasonable care and caution, which is one reason R.C. 5808.16(AA) separately gives trustees the power to hire financial advisors, accountants, and attorneys to help meet the standard. Trust assets that fund a living trust only serve their purpose once a trustee actually manages them prudently after funding is complete.

What Is the Duty to Keep Beneficiaries Informed?

R.C. 5808.13 requires a trustee to keep the current beneficiaries of the trust reasonably informed about the trust and its administration, respond to a beneficiary’s reasonable request for information, and, for certain trusts, provide required reports on the trust’s assets, liabilities, receipts, and disbursements. R.C. 5808.10 separately requires the trustee to keep adequate records of the administration of the trust.

R.C. 5808.13 creates the duty to inform and report. The duty to inform and report keeps beneficiaries able to hold a trustee accountable. Beneficiaries who never receive an accounting have little way to know whether the trustee is meeting the loyalty, impartiality, and prudence duties described above, which is why courts treat a persistent failure to report as evidence of a broader problem with the trust’s administration.

Can an Ohio Trustee Delegate Duties or Hire Professionals?

Yes. R.C. 5808.07 allows a trustee to delegate duties and powers, such as investment decisions, that a prudent trustee of comparable skills could properly delegate under the circumstances. R.C. 5808.16(AA) further gives every trustee the power to employ agents, attorneys, accountants, and investment advisors.

R.C. 5808.07 authorizes delegation of trustee duties. A trustee who delegates must still exercise reasonable care in selecting the agent, setting the scope of the delegation, and periodically reviewing the agent’s actions. Delegation does not eliminate the trustee’s own duty of oversight. A trustee who hands off investment management to a financial advisor still has to monitor that advisor’s performance and step back in if the arrangement stops serving the beneficiaries. Trustees stepping into the role after a grantor’s death or incapacity, for example under a plan built around incapacity planning, often lean on this power early while they get up to speed.

What Happens If a Trustee Breaches These Duties?

R.C. 5807.06 allows the settlor, a cotrustee, or a beneficiary to ask the probate court to remove a trustee for a serious breach of trust, for cotrustee conflict that impairs administration, or for unfitness or persistent failure to administer the trust. A trustee found to have breached a duty can be ordered to repay losses and can face personal liability.

R.C. 5807.06 sets the grounds for removing a trustee. A serious breach of trust can result in removal and repayment. The court can also act on its own initiative or order interim protective measures while a removal request is pending. Beneficiaries who suspect a breach typically start by requesting an accounting under the duty to inform, then, if concerns remain, file a petition with the probate division of the county Court of Common Pleas. Trust agreements built to avoid the delay and expense of probate still rely on the probate court’s oversight when a trustee dispute needs a judge’s decision, and trusts designed for asset protection depend just as heavily on a trustee who actually follows R.C. 5808’s duties, since a court can unwind protection built on a breach.

Frequently Asked Questions

What are the fiduciary duties of a trustee under Ohio law?

An Ohio trustee’s fiduciary duties, set out in R.C. Chapter 5808, include loyalty solely to the beneficiaries, impartiality among multiple beneficiaries, prudent administration and investment of trust property, control and protection of trust assets, adequate recordkeeping, and keeping beneficiaries informed. These duties exist regardless of what the trust document says, unless a specific statute allows the terms to modify them.

Can a trustee also be a beneficiary of the trust in Ohio?

Yes. Ohio law does not prohibit a trustee from also being a beneficiary, and it is common for a surviving spouse or adult child to serve as both. The duty of loyalty under R.C. 5808.02 still applies, so a trustee-beneficiary cannot favor their own share over other beneficiaries’ interests or use trust assets outside the terms of the trust agreement.

What is a successor trustee?

A successor trustee is the person or institution named in the trust agreement to take over administration if the original trustee dies, resigns, or becomes incapacitated. Every one of the duties described in R.C. Chapter 5808, from loyalty to recordkeeping, applies to a successor trustee the same way it applied to the trustee who served before them.

Can a trustee delegate investment decisions?

Yes. R.C. 5808.07 allows a trustee to delegate functions, including investment management, that a prudent trustee with comparable skills could properly delegate, and R.C. 5808.16(AA) authorizes hiring investment advisors directly. The trustee still has to exercise reasonable care in choosing, instructing, and monitoring whoever receives the delegated duty.

How can a trustee be removed in Ohio?

Under R.C. 5807.06, a settlor, cotrustee, or beneficiary can petition the probate court to remove a trustee, or the court can act on its own, for a serious breach of trust, harmful conflict among cotrustees, or unfitness or persistent failure to administer the trust effectively. The court can also order interim protective measures while a removal request is pending.

What happens if a trustee keeps poor records?

R.C. 5808.10 requires a trustee to keep adequate records of trust administration, and R.C. 5808.13 requires reporting to beneficiaries on request. Persistently poor records can support a finding that the trustee breached these duties, which under R.C. 5807.06 can lead to removal, and a trustee found to have caused losses through mismanagement can be ordered to repay the trust.

Discuss your next step

Someone has placed considerable trust in you, and you do not have to begin by guessing at the next step. Seek a clear understanding of the documents and responsibilities before making important trust decisions. We invite you to schedule a complimentary 15-minute Strategy Session with Intake Services and begin the conversation about your goals and working with the firm.